Set the Standards

By Jeffrey Klineman

I didn’t start this talk. Mike Kirban brought it up, for one, and the Kombucha folks have been talking about it since at least the middle of last year. Heck, many of the industry stalwarts like Coke and Pepsi have worked on it themselves in one guise or another.

But I’m going to mention it here, and ask, right away, what you think about it yourselves.

What am I talking about? The standardization of industry norms and best practices for emerging beverage categories.

Kirban, the CEO of Vita Coco, brought it up at BevNET Live in Santa Monica, discussing it as a way to hedge against consumer confusion and disappointment regarding coconut water. And while Kirban undeniably has a dog in the fight – his chief competitor uses a product made from concentrate, while he uses pure juice – the fact is that there’s still enough noise around coconut water’s signal properties and attributes, as well as enough new entries into the category, that it would be good for the industry to officially define what it is and what it does before anyone else does it for them.

The most compelling reason for this is that industry standards and practices often form the framework for what regulatory agencies adopt. If you build good bones, then even when the government arrives – and it will, and there’s no reason it shouldn’t – the structure it builds around those bones will help support it, rather than try to knock it down and start the whole thing all over again.

Certainly, the Kombucha business has been negatively affected by the lack of standardized practices. While the bifurcation of products into above and below .05 percent alcohol has kept a repeat of the Summer of 2010 at bay, it’s going to take just a couple of rogue fermented bottles on the Whole Foods shelf to knock all of the producers back to square one again. The best defense against that is a shared set of standards that the industry can compare with individual product lines during that kind of emergency situation.

For functional products, which are already entering into a landscape with boundaries formed by the Food and Drug Administration and the Federal Trade Commission, many of the standards are already in place, but there’s still potential for self-policing to work. Products that are supposed to produce certain effects can use scientific study to indicate efficacious dosage minimums on their own. Again, when the government comes knocking, the standards of the science you’re using are going to be evaluated and it’s better to talk to the lawyers now, from an inoculation standpoint, then later, when you’re trying to figure out what parts of the body you can save.

These kinds of ideas aren’t radical. As I said, big food companies have longstanding best practices for advertising claims, ingredient standards, packaging and safety. Some of them were adopted under pressure from the outside, some came internally. As they’ve grown, they’ve found increasing need for lobbying arms, industry-based media campaigns, and increasing knowledge about where companies can work together and where the rifts are the result of competition.

Knowing where those rifts lie is a good problem to have. Lots of the companies we write about and speak with talk of growing categories as much as they do of growing brands. There are ways to do that from a firm base – best practices can help establish a significant part of that base.

At the entrepreneurial level, there have been a few attempts at best practices. In the past, Yerba Mate companies have met regularly to discuss issues, but they are the exception. Most of the best practices are attribute-based – fair trade and organic groups operate under their own certification mandates, as do carbon offset rating agencies. Those examples clearly illustrate places where government oversight has been largely determined by industry practices; but as of today, in most emerging beverage categories, there has not been enough pooled research or definition of goals to help communicate those messages to consumers or regulators. From a sales standpoint, it shows a clear lack of vision; from an intervention standpoint, it’s just plain dangerous.

At least, that’s how I see it. How many of you would work with others in your evolving product categories to establish or discuss standards? How many retailers and distributors would feel more comfortable selling products that come from at least a minimal level of industry oversight? How many of you believe that you should all hang together, or else run the risk of hanging separately? Let us know what you think.